The interest rate of personal loans varies depending on many factors relating to the borrower. Some of these are your loan amount, annual income, as well as the loan duration.
These factors help licensed money lenders measure your capability of repaying back the debt on or before the deadline. This has a huge effect on the loan. The less risky the loan is, the lower the interest rate becomes. This makes it easier for the borrower to repay the loan.
The usual interest rate of banks is around 7% annually. This means that if you borrow S$20,000 with an interest rate of 7% and you’ll repay it within 3 years, then you’re going to incur an interest rate of S$1,400 annually. Though interest rates vary, it usually comes around this figure.
How much interest do money lenders charge?
Unlicensed moneylenders usually charge higher interest rates. Though the government created a 4% maximum cap on monthly interest rates, licensed money lenders still usually double their interest rates compared to banks, sometimes even going four to five times higher than from banks.
An example would be borrowing S$500 with an interest of S$20 monthly. That might not be that much if you pay it within a month. But that value will cost you hundreds, if not thousands of dollars more in interests and administrative fee if you pay late.
However, that’s not the case for all money lenders in Singapore. Take for example 365 Credit Solutions, which is considered one of the best licensed money lenders in Singapore. They offer low rates depending on the background of the loan applicant. Their loans can even go head to head against banks.
Knowing More About Licensed Moneylenders
Licensed money lenders target clients who were rejected by banks, which is why they make sure that they cater to their needs. Banks make sure that loan applicants have a low-risk profile, unlike lenders that even approve the riskiest of background.
Banks usually don’t approve loan applications from people who have a salary less than S$20,000. Meanwhile, moneylenders are pretty good with people who are on this salary bracket. They don’t even put much emphasis on their credit history. They also don’t need to get strict supervision from the ministry of law as the ministry of law only focuses on banks.
Another defining characteristic of moneylenders is that they don’t usually approve huge loans, unlike banks. The usual maximum loan they can approve is around S$1,500 for clients who have salaries of less than S$20,000. Meanwhile, banks can lend up to 2x to 6x your monthly salary as long as you have good background and credit rating.
Review and assess your current situation first before filing an application. You don’t want to be paying heavy fines and interest rates. Moneylenders can, however, take care of these especially if they have a copyright 2019.
What is the interest rate for private loans?
Private loans from PTE companies have high interest rates. The usual ones start at around 4% and can go up to 7.5% and even higher. This makes the cost of borrowing money more expensive for PTE firms. However, there are also loans that have much lower interest rate, but this is reserved for those who have annual salaries of S$50,000 and above, as well as those having good credit rating.
Private money lenders or PTE also have terms and conditions that charge higher interest rates compared to banks. It’s because they lend funds to high-risk clients. This means that there’s a chance that the PTE won’t get paid back. Private loan sharks also usually borrow money from other investors and even possibly banks that charge higher interest rates.
All these increase the costs of a PTE because they have to pay back the funds they borrowed from the bank and other private investors.
Thus, the possibility of not getting back the lent money makes up for the higher-than-average interest rates of a PTE lender.
What is the legal interest rate?
The legal interest rate varies, but it currently is around 4% to 6% annually. This, however, isn’t strictly followed especially by a PTE because of the varying circumstances depending on the borrower’s credit rating and background.
Which moneylender is the best in Singapore?
There are a number of banks that offer attractive loans for borrowers. However, it’s best to go for a licensed moneylender in Singapore. One of the best and credible choices is 365 Credit Solutions.
We are a renowned moneylender in Singapore since 2010 and is even accredited by the Singaporean Registry of Moneylenders.
Clients can benefit from us because we have different kinds of loans such as bridging, personal, business, and foreigner loans, both for Singaporeans and foreigners alike. This makes it easier for you to choose the kind of loan you need to solve your needs.
Settling for a loan application is also easier with us because our process is simplified and we don’t require much and unnecessary documents unlike other PTE firms. You will benefit greatly from this because you don’t have to spend lots of time waiting for your loan to be approved.
Clients don’t have to worry about their funds when you’re with us because we do our best to have your loan applications approved as long as you conform to the requirements. Payments are done fast and can be attested by the many reviews found in the internet about our company.
Our clients can also benefit from our transparency because there are also no hidden costs. Loan and debt processing take only one hour and the cash is given to you directly. There’s no more need for annoying phone calls or overly complicated rules and regulations with 365 Credit. Simply send the payment via bank transfer and you’re good to go.